Gold soars crazily! Focus on Fed meeting on Wednesday (with trading strategy)

Driven by the weaker U.S. dollar, the price of gold rose sharply on Monday. Spot gold closed at US$1866.75 per ounce, up US$23.44 or 1.27%.

The market will pay close attention to the performance report released this week to determine whether the price increase has affected consumer demand and whether the retailer can maintain a strong profit momentum.

On Tuesday, the world's largest retailer Wal-Mart and home improvement retail giant Home Depot will announce results, the market remains concerned about this.

In addition, the Fed will announce the minutes of its April monetary policy meeting on Wednesday, and market participants will look for clues about the Fed’s views on the current surge in inflation.

"We expect the minutes of the meeting to reiterate that policymakers believe that inflation is a temporary phenomenon," said Kim Mundy, a foreign exchange strategist at the Commonwealth Bank of Australia (CBA) in Sydney. "The result is that we don't expect the (Fed) to consider reducing the scale of asset purchases in the short term. After being stimulated by the consumer price index (CPI) data last week, the U.S. dollar is expected to resume its downward trend this week."

Trading strategy (Source: Trading Central)

Pivot: 1854.00

Our preference: long positions above 1854.00 with targets at 1870.00 & 1877.00 in extension.

Alternative scenario: below 1854.00 look for further downside with 1844.00 & 1836.00 as targets.

Comment: the break above 1854.00 is a positive signal that has opened a path to 1870.00.

Supports and resistances:

1897.00

1877.00

1870.00

1865.20 Last

1854.00

1844.00

1836.00

Guideline for Trading Central strategy 

Trend chart reading guideline

1. First look at the time period in the upper left corner of the chart: ·30MIN and 1H chart shows the trading suggestions for intraday ·Daily chart shows the market trend analysis in next 2-3 days

2. The blue horizontal line on the chart marks the pivot: pivot indicates the reversal of the market. When the price is above the pivot, it indicates an upward trend, when the price is below the pivot , it indicates a downward trend. When the price breaks through the pivot, the trend is reversed.

3. The red and blue thin curves in the Candlestick chart chart are technical indicators: Red line is MA20+Bollinger bands, Blue line is MA50. under the Candlestick chart chart are also the technical indicators: Blue line is RSI, Red line is 9MA;

4. The green horizontal line is the resistance level for a price increase, and is also the profit target for long orders; the red horizontal line is the support level for a price decrease, and is also the profit target for short orders.

How to use TC strategy？

1.[Pivot] is the reversal line of the market trend. When the price up the pivot line which means in Bullish, you can open a long position or Buy. on the contrary, when the price under pivot line which means in bearish. You ‘d better make short positions or Sell. 

2. [our preference] is the main trading suggestion for your reference. You can exit your trading refer to this target or close positions before it.

3. [Alternative scenario] is the plan B for your reference. 

4. [Comment] is the technical analysis of market trends and technical support for trading strategies. 

5. [Supports and resistance] Supports are levels where the price tend to find support as it falls.

Resistances are levels where the price tend to find resistance as it rises. So, exit before the trend reverse.